The Different Types of Foreign Exchange Reserves in China

In the case of China, because of existing rules and regulations, the government simply cannot just say, I'm going to use foreign exchange reserves to do risky investment. This is not the case. The moment they are invested, they are taken out of the pocket of the central bank and used for risk bearing investment. Basically you transform foreign exchange reserves into some other types of asset. And in the case of CIC, China, you must know corporation, the leverage aspect becomes more explicit in the sense that ministry finance literally issued bond, special purpose bond and use the bond proceed to buy foreign exchange reserves outside of the PBOC. So from this perspective, you can literally witness an expansion of the